The Importance of the Urban Energy Cloud to Meeting City Climate Goals

Published: Thu, Jun 14, 2018

Author: Eric Woods

Type: Insight

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The importance of cities to meeting global climate targets is undisputed. Cities are responsible for more than two-thirds of global energy use and greenhouse gas (GHG) emissions. If current trends continue, it has been estimated that urban emissions could grow by 50% by 2050. On the positive side, transformative action in cities could significantly contribute to the mitigation required to achieve a 2°C target for global warming.

It has been estimated that by instigating a range of emissions reduction actions, cities could reduce annual GHG emissions by up to 3.7 gigatons of equivalent carbon dioxide (GtCO2e) by 2030 and 8.0 GtCO2e by 2050, leading to cumulative reductions of 25 GtCO2e by 2030 and 147 GtCO2e by 2050. Equally important, addressing climate issues can be closely aligned with other critical urban programs that can ensure the resilience, safety, and health of an expanding urban population.

Since the Paris Agreement, city leaders globally have been making commitments to deliver the necessary reduction in urban emissions to meet global climate goals. The work necessary to deliver on those climate commitments needs to start now. The C40 Cities Climate Leadership Group has estimated that 97% of the actions needed to achieve global emissions goals for 2050 will have to be implemented in the world’s leading cities by 2030. Given the speed of urban planning processes and infrastructure programs, this means that cities and their partners will need to instigate many of these projects within the next 3-5 years.

There is also an important window of opportunity for emerging cities to embed mitigation plans into infrastructure development. Given that much urban infrastructure can last for a century or more, cities that fail to invest in low carbon options today may be locked into emission intensive choices for roads, buildings and energy systems over many decades to come.

The Emergence of the Energy Cloud

To create the zero carbon cities of the future, a holistic view across the different aspects of city infrastructure and services that influence GHG emissions is required. The city of 2030 will need to comprehend and manage a much more complex set of interdependencies between diverse aspects of city operations, infrastructure, platforms, and priority issues such as health, mobility, sustainability, and economic development. This requires new networks for collaboration between cities, utilities and other energy sector players, as well as transportation providers, building owners, telecommunication companies and technology suppliers.

Navigant Consulting, Inc. (Navigant) characterizes this transformation across energy and related sectors as the Energy Cloud. The Energy Cloud represents a radical transformation of energy markets to a more dynamic network of stakeholders, technologies, and infrastructure. Specifically, it envisions a world in which the power supply is cleaner and more distributed, where digital transformation embraces artificial intelligence, the Internet of Things (IoT) and blockchain-enabled networks, and where widespread electrification of transportation means that power supply and demand become increasingly mobile.

This transformation touches every aspect of city services and infrastructure, including power generation and distribution, heating and cooling systems, building energy efficiency, transportation, water and waste management, and the efficiency of city services such as street lighting. At the same time, city operations are being transformed by digital technologies such as IoT, smart buildings, artificial intelligence robotics, and automated vehicles.

One of the most important developments for cities looking to transform their energy profile is the interlinking of the energy sector with buildings and transportation. A zero carbon city will need to address the role of fossil fuels in space heating and in transportation. It is the much closer connection between buildings and transportation and the energy network that will lay the foundation for a new Urban Energy Cloud.

Steps Toward an Integrated Approach to Urban Sustainability

Realizing the potential for urban carbon mitigation will require a combination of new energy solutions, new technologies and new approaches to city management and operations. One of the biggest challenges for cities is to understand the interplay between these different elements of the low carbon city. Which platforms—technical and commercial—will enable a digital, low carbon, sustainable economy to thrive? What forms of collaboration across sectors are necessary, and what common infrastructure is required? How can new transportation services, zero carbon housing, local microgrids and smart street programs address the issues facing poorer communities?

Some basic steps can help cities be better prepared to address these issues:

Clear, actionable climate plans are necessary to realize the potential of local climate action and to help navigate the alternative options where emissions will be locked in and choices are complex (e.g., district versus electric heating, hydrogen versus electrified transport, in-depth versus superficial building renovations).

Cities need to continue to raise the bar on traditional approaches to urban design and construction. This includes embedding smart and sustainable design principles in urban planning processes. The potential of digital technologies needs to be considered as part of any new development.

Pilot projects should be closely aligned to city priorities and assessed for business viability and for the potential for expansion. The focus should be on mainstreaming innovations and quickly scaling up positive pilot project results.

Cities should look to create platforms for collaboration and procurement on which cities and other stakeholders can drive innovation (technology and business models), develop business cases, execute pilots and form partnerships to implement and scale new energy solutions.

Business opportunities in the energy transformation

Cities and communities will need partners to develop and manage this complex network of energy innovations, services and resources. These developments offer immense opportunities to utilities, service providers and technology companies as they help cities drive productivity improvement and economic development from energy, transportation and technology innovation. However, it is also important that energy transformation programs are aligned with other city priorities, including social inclusivity, economic development and environmental improvement.

City governments need to create the conditions under which stakeholders can quickly move from developing a mutual understanding of each other’s needs and challenges to co-creating stable, scalable, and replicable solutions. There is no final endpoint determined by a single, engineered system. These complex environments need to evolve through a process of innovation, monitoring, and continuous learning.

Eric Woods is a research director with Navigant Consulting, Inc. In a new white paper, Navigating the Urban Energy Transformation, he describes critical elements of the emerging city energy landscape and reviews the key recommendations for cities and their partners.

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